Is the Allais paradox due to appeal of certainty or aversion to zero?

A-Tier
Journal: Experimental Economics
Year: 2021
Volume: 24
Issue: 3
Pages: 751-771

Authors (3)

Elif Incekara-Hafalir (not in RePEc) Eungsik Kim (not in RePEc) Jack D. Stecher (University of Alberta)

Score contribution per author:

1.341 = (α=2.01 / 3 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Abstract We provide a novel but intuitive explanation for expected utility violations found in the Allais paradox: individuals are commonly averse to receiving nothing. We call this phenomenon the zero effect. Our laboratory experiments show support for the zero effect. By contrast, the evidence for the certainty effect is weak to nonexistent.

Technical Details

RePEc Handle
repec:kap:expeco:v:24:y:2021:i:3:d:10.1007_s10683-020-09678-4
Journal Field
Experimental
Author Count
3
Added to Database
2026-01-29